Özet: This paper investigates the effects of engagement partners’ attributes on earnings quality using 725 firm*year observations between 2008 and 2013 from Borsa İstanbul manufacturing industry firms. We use two indicators of earnings quality to test the effects of gender, educational background, experience and certification from among engagement partners’ attributes. Our findings emphasise that engagement partners’ attributes do not have any impact on real activities-based earnings management but have an impact on accruals-based earnings management. Female engagement partners have a negative effect on the absolute value of discretionary accruals, especially in negative discretionary accruals. On the other hand, we find that engagement partners with longer experience have negative impact on the absolute and negative discretionary accruals.

Sharia compliance shows that the compliant company operates not only under the regulations but also to the restrictions and permission of Islam. The primary sources for the compliance are Holy Qur’an and Sunnah. In other words, one may expect a Sharia compliant company to act in a higher of degree of ethics. This research reveals the behavioral differences of earnings management between Sharia compliant and non-compliant companies with cross-listing, Islamic financial elements and for specifically during the Sub-Prime Mortgage Crisis Period (2007-2009) with six different models. The sample is constructed from 16 Muslim majority countries, 1,833 companies for the periods between 2006 and 2016. Earnings management is measured as with Kothari, Leone and Wasley (2005) and Roychowdhury (2006) for discretionary accruals and real activities manipulations respectively. According to the results, Sharia compliance has an upwards effect on the discretionary accruals, while cross-listing decreases the discretionary accruals, regardless of compliance. Also, the results showed that Sharia-compliant cross-listed companies are more conservative with the accruals compared to their non-compliant counterparts. According to the real activities manipulation model, regardless of compliance, companies managed their upwards using their real activities but Islamic financial elements created decreases in the earnings management via real activities.